Tag: Michael Dell

Michael Dell is so pleased with his shiny new EMC acquisition and his going private that he is predicting a digital transformation explosion in businesses.

Talking to Dell EMC World 2017 Dell said that: “This isn’t our show, this is your show. It’s about how you’re changing the world and using transformation to change your businesses. Making digital transformation happen, making it real, that’s why we created Dell Technologies, combining innovations from Dell EMC, Pivotal, RSA, Secureworks,Virtustream and VMware. This allows us to innovate like a startup with the scale of a global powerhouse.”

Michael Dell enthused about the importance of both Digital and IT transformation, not only in the technology industry but in the whole workforce.

Dell said: “We are at the beginning of an innovation explosion. CEO’s want their companies to become technology companies. You’re competing with startups who are more sophisticated at injecting new products into their platform. You need an IoT strategy, a cloud strategy and a workforce strategy. As well as security, that’s the highest priority of all.”

Ten years ago, the very word Dell was enough to send VARs, VADs and, let’s face it, the rest of the channel into streams of invective, punctuated by words you wouldn’t want your nan to hear you speak. Like the expletive “direct sales”, for example.

But, it seems, everything has changed and now Dell loves the channel and, incredibly, the channel seems to love Dell too. Channel Eye took time out from our incredibly stressful schedule to spend a day at a security partner reseller conference in Budapest and got to chat to several senior executives and resellers too, for that matter, who spelled out the sea changes that have happened at the Round Rock company.

While Dell is still seen by many as the PC tin maker that put the wind up conventional and indirect players like HP and the rest, it’s made a number of acquisitions in the last few years that mean the barque is now being steered in an entirely different direction. Those include SonicWALL, Quest and others.

The changes have been engineered at the highest level – that is to say by Michael Dell himself – with the assistance of senior exec Cheryl Cook. Unbelievably for an old channel hack like me, 32 percent of Dell’s business now goes the indirect route, worth an estimated $20 billion of revenue, under the umbrella of Partner Direct.

Channel Eye interviewed senior members of the EMEA channel team, including Andy Zollo and Marvin Blough – executive director of Dell’s worldwide channels and alliances. We also had the opportunity to talk to Patrick Sweeney, executive director of product management at the corporation.

Sweeney said: “Dell is in the process of becoming an end to end supplier of scalable systems. Dell continues to build PCs, but relies on value added resellers (VARs) to be trusted advisors [to customers].” He said that Dell is now a serious player in software and security and offers products that he claimed favourably compete with the likes of Cisco, Fortinet and others. The company, he said, invests heavily in R&D, has a wide breadth of products and the idea of Dell as a major player in security and software is promoted by Michael Dell himself when he makes major announcements.

In fact, Dell has something like 124 VARs in the EMEA region. The trend is that larger companies have started to rely on VARs to help them through the IT maze, whether that be in the cloud, in big data, or in security. Florian Malecki, who is the international product marketing director at Dell, said his company also relies on value added distributors (VADs) to generate events and training schemes.

How does it all work? Under the Dell umbrella of Partner Direct, the company operates certification for its channel partners at different levels, said Zollo. The tiers are premier partners, preferred partners and registered partners, but, he said, Dell is about to introduce a fourth category – managed service providers (MSPs). Dell continues to roll out partnership initiatives and concedes that while it still has direct customers, the trend is to move towards an indirect model to allow it to penetrate different markets. It’s impossible to operate a direct model in the many markets it now plays in.

Zollo says that the company has a “direct touch” sales team that cross sells all the products it has – and this umbrella model means that Dell GCC is able to operate across a wide area of customers and partners.

Who would have thought it? Dell was once a company that wouldn’t even talk to channel publications like ours. But it looks as if it will be talking to us more and more in the future. It relies on its VARs and its VADs for deep levels of specialisation, training and support.

We guess that HP must be gazing at all of this with quite some alarm. And Lenovo, for that matter.

Hardware giant Dell claimed its two top channel tiers, PartnerDirect, and Premier and Preferred, grew by 29 percent in the last year.

Michael Dell, the founder of the company, told attendees that there are now 1,174 Premier and Preferred level partners in EMEA. He said the channel continued to be important to Dell’s strategy.

Dell claimed that PartnerDirect, including the online solutions configurator has been adopted by over 600 partners across 10 companies.

Michael Dell said: “We see our partners as a core part of our team, our strategy and our future, and we will continue investing to grow our business together.”

Gongs were handed out to UK company Softcat, winning UK partner of the year and platinum partner of the year. Pictured are Laurent Binetti, Greg Davis and Michael Dell himself. Michael Dell is second from the left and we don’t know which one is Laurent, which Greg and we don’t know who the others are. Sorry.

Dell has been in the news for all the wrong reasons lately. The company is embroiled in a protracted battle between CEO Michael Dell and celebrity investor Carl Icahn, who doesn’t want the company to go private. As a result of Icahn’s grandstanding, practically every Dell headline over the last few months had more to do about Icahn and his supporters than the company itself.

Business is not going well, but thanks to the mess, nobody seems to be paying much attention. On Thursday the company reported a 72 percent dip in quarterly earnings and flat revenue. The results were predictable, as practically every PC maker that’s not Lenovo is struggling.

Net income was $204 million, down 72 percent year-on-year. Revenue was flat at $14.5, but it still managed to beat Wall Street’s estimate of $14.18 billion. Dell’s net income was 25 cents per share, a penny better than expectations.

Last quarter Dell shipped 8.98 million PCs, down from 9.35 million a year ago. Dell still ranks as the third biggest PC seller with a 12 percent share. Lenovo and HP have slightly over 16 percent of the market each.

There were some bright spots, too. Enterprise computing revenue was $3.3 billion, up 8 percent year-on-year. Sales of networking hardware and servers were also up.

Ironically, the downturn could benefit Michael Dell in his ongoing row with Icahn. Icahn still insists that Dell is trying to buy the company for less than it’s really worth, but if the PC market keeps underperforming, Icahn might be about to run out of arguments.

Tinbox supremo Michael Dell and buyout partner Silver Lake may well be reaching a deal with Dell’s special board committee to increase the price they’d pay – as long as the voting rules are tinkered with to make sure they win.

People familiar with the matter told the WSJ that Dell’s new deal isn’t done yet but if it were to go through, the per-share price would be bumped up from $13.65 to $13.75, as well as include a special dividend for shareholders.

The vote is set for today. But if Dell and Silver Lake successfully convince the committee to modify the voting rules, the shareholder vote could be staggered by as long as one month.

According to the WSJ, the change to voting rules would make it so only shares that are actually voted count. As it stands, abstentions count as a “no”.

It is possible with a change to the rules the deal could well pass. But it will upset top shareholders such as Carl Icahn, himself gunning for control over Dell, who started dragging Dell through the courts as of yesterday about the change.

Dell’s quarterly net profit has slipped 79 percent as the company endures the struggle to see who will carve up the majority share and in which direction it will be taken.

That sounds rather dramatic, but in reality the company is still worth a heap. Total revenues for fiscal Q1 2014 were $14.1 billion.

In a prepared statement, Dell CFO Brian Gladden said the company had made progress in building its enterprise offerings and is “confident in our strategy to be the leading provider of end-to-end scalable solutions”. Additionally, Gladden said the company has been taking actions to improve Dell’s competitive position. “We’ll also continue to make important investments to support our strategy and drive long-term profitability” – more shopping?

Enterprise Solutions Group had revenues of $3.1 billion, a ten percent increase on the previous quarter, with a 71 percent boost in operating income at $136 million. Dell Services enjoyed two percent growth to $2.1 billion and an 11 percent increase in revenues from infrastructure, cloud and security services. Support and deployment also grew two percent, but applications and business process services dropped 15 percent. Operating income grew 10 percent to reach $370 million.

Dell software saw an operating loss on the back of $295 million in revenues. However, Dell believes this segment is “on track to be accretive” to earnings for Q1 fiscal 2015. End user computing declined nine percent, with revenues at $8.9 billion for the quarter. Desktop and thin client revenues dropped two percent, mobility declined 16 percent, and software from third parties and peripherals declined six percent.

PC sales plunged nine percent but in fairness, this is expected. The entire world is in a slump and, although Dell offers some kit at the low end of the market, no one’s really buying.

However, Dell did point out that new technologies revenues as well as services and software gained a 12 percent boost, to reach $5.5 billion.

Tin-box enterprise supremo and founder Michael Dell really wants to gain a majority share in the company so he can take it off the public market and shift it in a new direction – some whispers suggest the way of IBM, discarding a burdensome consumer unit and focusing fully on enterprise, services and related businesses. Michael Dell’s proposed buy-out, along with Silver Lake, is just short of $25 billion.

Shareholders Carl Icahn and Southeastern Asset Management are trying to wrangle the company back from Mike and Silver Lake’s grip, insisting that the valuation is peanuts and investors should get much more for their buck. They are making their own proposals for the company, in a power struggle which has been ongoing for months.

Dell did not issue a company outlook, citing the announcement for a merger agreement to take Dell private as the reason.

A report claimed that Dell will announce results tomorrow that don’t match the expectations of financial analysts.

The Wall Street Journal claims to have talked to a person close to the matter who indicates profits continue to fall, as Dell slashed prices in order to boost sales.

The results were supposed to be out on May the 21st but have been brought forward, the source said.

And it indicates revenue will amount to around $14 billion, and comes against the background of potential buyouts from Michael Dell himself, in competition with Carl Icahn and Southeastern Asset Management.

It’s not just Dell that’s been slashing prices, but some suspect there’s politics related to the potential buyout that’s pushing the company to announce its results tomorrow, rather than wait a few weeks.

Tin-box shifter Michael Dell has found himself in the middle of a three-way proxy war for control of his company and might go out like Richard III screaming for a horse and ending up under a carpark.

Dell hit the headlines by allying with Silver Lake in a bid to take his company private. Really, that should have been the end of matters. Dell owns a big chunk of company stock, he founded the company in the first place and it desperately needs a restructuring.

Shareholders should logically be pleased to see a return on their cash at all, as the value of the outfit is likely to get a lot worse before it gets better, if it gets better. For some reason they are not.

Instead we are seeing the various big shareholders ganging up to try and take control before Dell can get the company private.

The question is what they hope to gain. In the middle of a recession, where Dell’s traditional buyers are saving their pennies, the company is paralysed. The only part of the IT industry that is moving at all is the mobile sector and Dell is not a big player there. Dell is doing alright in enterprise.

Logically a company in Dell’s position should restructure, cut back to basics and survive on its cash reserves until things pick up.

This is the opposite of what shareholders want. They want the company to show continual growth so that the share price will increase. By going private, Dell is protected from the wrath of shareholders and can look to the longer term.

While all sides are talking about having the best interests of the company and shareholders at heart, it is fairly clear that the only one who really cares about Dell as an ongoing concern is Michael Dell himself.

Blackstone, Carl Icahn, and Silver Lake Partners all have ideas to take the company private. But their idea can only be to take over and flog off all the company assets and distribute the last of the cash.

This can be the only reason why they are swarming around Dell like flies.

Otherwise any observer who lifts the bonnet of Dell has to take a sharp intake of breath and admit that in the short term Dell is buggered. Its core business market is rotting and its quarterly sales in its consumer sector are sliding.

A management plan presented to the board last July expected $5.6 billion in operating income this year. That was later reduced to $3.7 billion, but is likely to be revised lower still.

Global shipments for PC makers declined 3.2 percent last year and are predicted to fall more than 10 percent in the current quarter. Dell has not really seen any benefits from the launch of Windows 8 or the Ultrabook.

This puts Dell’s board in a difficult position. So far they have supported Michael Dell but now they have to work out if offers from Blackstone and Icahn will lead to a better bid than the one from Michael Dell and Silver Lake.

They will have to look at the deal in terms of cash. They can’t take the perspective that it’s better for the company to go with Michael, they always have to say “the average shareholder will do better”.

The three rival offers are critically different. Dell and Silver Lake will buy out shareholders for $13.65 a share, valuing Dell at $24.4 billion. If the preliminary offers from Blackstone and Icahn do not firm up, this is the best shareholders can expect. Currently you can pick up a second hand Dell share for $14.50 so a lot of people will be out of pocket.

To make matters worse, few people will invest in Dell shares while there is a big argument about the outfit’s future. Corporate buyers thinking about getting in a few Dell boxes want to know if the company is going to be around in a few years.

Blackstone’s offer of more than $14.25 a share to all investors who want to cash out would mean that Dell is worth $25 billion.

Icahn, on the other hand, is offering to buy 58 percent of shares for $15 apiece.

At the moment, analysts say that Blackstone has the highest chance of success. That could cause Dell some major headaches. For a start it is likely that Michael Dell himself will be removed from the company.

There are rumours that Icahn submitted his proposal only to keep discussions going, because he thought Blackstone may not submit an offer. It is likely that he will walk away from the deal but wants to make the most of his billion dollar investment in the company. He will want a large special dividend before he ties up with a rival bid, probably Blackstone.

Michael Dell’s own involvement with Blackstone would seal it, but it does not seem to be playing out that way. Earlier this week the Blackstone deepthroats were telling the press that he would be fired if they had anything do do with it. Officially, though, Dell has said that he will “explore in good faith” the possibility of working with Blackstone or Icahn.

He claimed he would be like Switzerland in favouring a form of armed neutrality.

But Blackstone wants to asset strip Dell’s financial services unit, worth an estimated $5 billion, and has apparently asked ex HP chief Mark Hurd about running the company. Dell, who is always a little hands on, has good reasons why he would not want this to be the case.

Either way all this is going to get a lot messier and is going to take months to sort out. What the three factions have to realise is that Dell, the company, could be killed off by their final Battle of Bosworth.

Last week Carl Icahn revealed he owned a big chunk of Dell and hit out at the original private equity proposal in conjunction with Microsoft and Silver Lake Partners..

And today, it seems, Icahn has stepped up the pressure by threatening it with legal action unless it accepted his plans to pump fresh cash into the multinational.

According to the Wall Street Journal, Icahn has signed a confidentiality agreement with Dell. But, the Journal said, the special committee that Dell set up to consider its future is reluctant to take the Icahn routemap.

Instead, it appears to be hoping that others will come forward to its aid. A number of partners has been slated including Dell rival Hewlett Packard – but it appears unlikely that HP will take a punt.

Meanwhile, business continues as usual, with Dell making a couple of product announcements. It is creating a mobile strategies division that will develop custom applications for corporations, and advise large enterprises about mobility needs.

And it continues to push into the cloud – announcing that Dell Boomi will offer a data management and integration system, using MDM tools based on software as a service (SaaS).

Following Dell’s acquisition of, er, Dell – taking the behemoth off the public market – CEO Michael Dell has penned an open letter to the company’s customers which promises “organic” and “inorganic” investment. Translation: Dell’s patent-packed Supermarket Sweep shopping spree will be ongoing.

At Dell Tech Camp, Amsterdam, last week, the company was very keen to assert the importance of acquisitions in its portfolio. Wyse, Kace, and the others were wheeled into Dell’s Software Group and it is clear from the time given to each that the company’s intended message was that it’s growing. It wants to continue to compete with HP and IBM in enterprise, and there are plenty of pre-packaged firms out there it believes it can pick up.

The letter opened by saying Dell’s agreement represents an “exciting new chapter for our company and for you, our customers”. Ultimately, more control in the paws of Michael Dell will define Dell at this transitional point in the company’s history.

“As always, our unwavering focus is on delivering a fantastic customer experience and creating value for your organisation,” the letter reads. “We believe that our proposed new ownership will provide long-term support to help Dell innovate, invest for growth and accelerate our transformation strategy. We’ll have the flexibility to continue organic and inorganic investment and drive industry leading innovation”.

Mentioning the past few years, Dell claimed that strategic execution has been “consistent”, and again mentioned that portfolio it has managed to swell. Considering the enterprise represents the overwhelming lion’s share of Dell’s products, services and technologies – will we see Mike pick Apotheker two from HP’s notebook under the latter’s short lived leadership? Some pundits guffawed when IBM dumped its consumer division, but it turned out to be for the better.

HP, meanwhile, struggles with ‘restructuring’ and was forced to write down the insanity of its Autonomy buy. We’ll say it right now: it will be Michael Dell’s hated box-shifting label for whom the Dell tolls.

Dell has confirmed it has sold itself to Michael Dell and associates for the princely sum of $24.4 billion.

Shareholders of Dell stock will receive $13.65 per share, when the transaction concludes. That’s a premium of Dell’s share price of $10.88, which was its closing price before rumours of the sale started to surface.

The board of Dell, which includes Michael Dell himself, unanimously approved the merger agreement with Michael Dell and Silver Lake Partners taking the company private.

Dell Inc has appointed a special committee to evaluate alternative proposals in a so-called go-shop period of 45 days.

Michael Dell said he thought the move was an “exciting new chapter for Dell” and its customers. He said he has put a “substantial amount” of his own capital at risk together with Silver Lake.

After the transaction is completed, Michael Dell will continue as chairman and chief executive officer. Parties affiliated with Silver Lake include Microsoft, Merrill Lynch, Barclays, Credit Suisse and others.